The days leading up to Christmas saw a noisy skirmish about council finances between the Labour leadership at Middlesbrough Council and a variety of Tory politicians. The row, which quickly spread to the national media, could be a omen of further conflicts in the new year.
Conservatives call for government to take control
The Tory Tees Valley Mayor Lord Ben Houchen, and Sir Simon Clarke, Conservative MP for Middlesbrough South and East Cleveland, have officially called on central government to take over running the Town Hall in the face of a financial crisis. Their formal joint letter sent on 13 December to Simon Hoare MP, the Parliamentary Under-Secretary of State for Local Government, claimed:
“Where councils do not to meet the high standards that we set for local government, it is right that government intervenes in order to protect the interests of residents..”
“The time has come for a statutory intervention before matters deteriorate further.”
An overspend of over £8.5mn was forecast for the second quarter of the financial year
In November the council passed a proposal to sell assets worth some £14mn. But according to a council report for the Executive Board the sale would still leave a hole of £6.27mn in the borough’s finances
The Conservative politicians wrote:
“The disposal of public assets in this way warrants serious debate both given the council accepts it will dent its long-term revenue income and that the council has a doubtful record of extracting best value from such sales in the past.”
The letter was co-signed by the local authority’s four Conservative councillors, including Mieke Smiles, Deputy Mayor under the previous Independent-Tory administration.
When a council is unable to set a legally balanced budget it is obliged to issue an S114 Notice – the local authority equivalent of bankruptcy.
In a meeting on 20 December, the council’s Executive Board agreed to recommend a 4.99% increase in council tax for public consultation.
Middlesbrough’s elected Mayor Chris Cooke was returned to office last May, which is when council control changed from the Independent – Tory coalition to Labour.
The mayor’s predecessor Andy Preston was officially an Independent, although he had close allies among the Tories, who backed him for re-election in May over the official Conservative candidate.
Response from Andy McDonald, MP
Andy McDonald, MP for Middlesbrough, (currently Independent and formerly Labour) wrote on 15 December to Simon Hoare MP, Parliamentary Undersecretary of State for Local Government, condemning Lord Houchen and Sir Simon’s letter. He wrote:
“I was really perplexed at the timing of this request given the clear direction of travel of the newly elected mayor. Councillors working with the recently appointed and highly experienced chief executive and S151 officer and others, who have been working effectively towards a resolution of ongoing and outstanding issues within the council.”
Mentioning the Best Value Notice that the previous administration had received in January with the threat of central government intervention, he continued,
“The council has engaged fully with the Chartered Institute of Public Finance and Accountancy and has in place a full programme for governance improvement which was agreed unanimously and cross- party by councillors”
Cue a statement from Prime Minister Rishi Sunak, fielding questions at a gift shop and cafe in Yarm, near to his home in his Richmondshire constituency. He claimed:
“On average, councils are having about 10% more money to spend this year than they had the year before.
“Middlesbrough Council has even more than that, more than the national average. And unfortunately this is just another example of a Labour-run council that is doing a bad job for its residents, mismanaging its finances.”
Mayor Cooke reacted to Sunak’s comments with a Facebook post:
“Today, the Prime Minister accused Middlesbrough Council of ‘mismanaging finances’ and as ‘an example of what you get when Labour is in charge’.
“In reality, government funding to councils across the country have been drastically cut. This has caused an epidemic of bankrupt councils including, the Conservative-run Northamptonshire County Council and Conservative led Thurrock Council.
“To deflect the blame, without addressing the systemic issue is incredibly disappointing.”
Middlesbrough is not alone
The borough is not alone in its financial difficulties. The Local Government Association estimates nearly one in five council leaders fear that they will have to issue an S114 Notice.
Simultaneously with the exchange of words, the government announced on 18 December that £64 billion would be ploughed into local authorities in 2024-25, under the Local Government Finance Settlement (LGFS), an increase of £4 billion on 2023-24.
The Tory attack begs a few questions. When the LGFS is finalised in early 2024, will Middlesbrough be a beneficiary after Sunak’s scathing criticism? Or will an S114 Notice be forced on the council?
Was the Tory attack a piece of media-PR in the pre-Christmas silly season? Or does it herald a choreographed local campaign in the run-up to the next General Election?
Time will tell.